PCCS Group Bhd has proposed to regularise its diversification into the credit financing and related insurance business while also seeking to distribute its finance subsidiary to shareholders as part of a corporate restructuring exercise.
The apparel manufacturer said it plans to seek shareholder approval for two proposals — the ratification of its diversification into the credit financing and insurance business and the distribution of its entire stake in Southern Capital Group Sdn Bhd to existing shareholders through a capital reduction exercise.
The proposed diversification relates to Southern Auto Capital Sdn Bhd (SAC), a wholly owned subsidiary incorporated in April 2021, which provides used vehicle financing and related insurance services across Peninsular Malaysia.
PCCS said the business has grown to become a significant earnings contributor, exceeding the threshold stipulated under Bursa Malaysia’s Main Market Listing Requirements (MMLR), which requires shareholder approval when a new business contributes 25% or more of a listed company’s net profit or involves a substantial diversion of its assets.
Previously reported under the “Others” segment, the business has been separately classified under the credit financing segment since the financial year ended March 31, 2024.
The company said the proposed ratification is intended to regularise its existing involvement in the business after the contribution from the credit financing and insurance operations exceeded the regulatory threshold.
Under the second proposal, PCCS intends to distribute its entire issued share capital in SCG to existing shareholders via a RM33.73 million reduction in the company’s issued share capital.
The proposed distribution is expected to separate the group’s apparel manufacturing operations from its financial services business, allowing each business to pursue its respective growth strategies independently.
